Export Controls on Critical and Rare Earth Minerals

Minerals are a significant fault line in the geopolitical tensions between China and the United States. Whereas the trade of minerals was once a constantly simmering point of contention between great powers, the fight has now boiled over due to the economic firestorm of “Liberation Day” and the resulting tariffs.

With the United States and China engaged in a continuing tug-of-war over strategic resources and trade, trade compliance professionals should be clear on what exactly is subject to these new controls. This piece will explain the categories of controlled minerals and how tariffs impact their control.

Rare Earth Vs. Critical Minerals Vs. Critical Materials

Rare earth and critical minerals are often treated as synonymous. This is not the case, and any conflation can obscure compliance obligations.

Rare Earth Elements (REEs) are metals which, though not rare in absolute terms, are often concentrated in a small number of strategically located deposits. Depending on the source, REEs are considered to number seventeen elements in total – the fourteen lanthanide heavy metals, Lutetium (a transition metal often grouped with the lanthanides), and two additional elements: Scandium and Yttrium. All seventeen elements are essential to the production of many critical components, including advanced electronics, and as such are seen as intrinsically tied to national security. China is the producer of the majority of rare earths.

Critical Minerals are a wider set of minerals, which are not a scientific category but rather a legal designation. These are defined in Section 7002 of the Energy Act of 2020 as “any mineral, element, substance, or material designated as critical by the Secretary [of Interior],” acting through the director of the U.S. Geological Survey.

Critical Materials are defined in Section 7002 of the Energy Act of 2020 as “any non-fuel mineral, element, substance, or material that the Secretary of Energy determines—

(i)  has a high risk of a supply chain disruption; and

(ii) serves an essential function in 1 or more energy technologies, including technologies that produce, transmit, store, and conserve energy.”

Critical minerals are, by definition, minerals that the Secretary of Energy has designated to the Critical Minerals List. What the U.S. government considers critical materials and critical minerals includes rare earths but extends beyond them.

In short, rare earths are a scientific category of exotic metals. Critical Minerals are elements designated by the Secretary of the Interior. Critical Materials are materials designated by the Secretary of Energy due to their necessity for energy production.

Figure 1. University of North Dakota – Comparison of Rare Earths and Critical Minerals

Critical Minerals vs. Critical Materials

Further complicating matters, the United States not only has a List of Critical Minerals but also a List of Critical Materials. Again, there is overlap between the lists, as many critical minerals and rare earths are also on the Critical Materials List. The Critical Materials List captures the so-called “electric eighteen” minerals for energy and the fifty “critical minerals” that range from rare earths to more common elements such as aluminum.

Why are Minerals Now Contentious?

Rare earth and critical minerals have been a contentious issue for Sino-American relations for over a decade. While the name rare earth is largely a misnomer acquired from the many long years it took scientists to isolate them and the expense required to extract them during mining, the United States relinquished its early advantage in rare earths by outsourcing their production to cheaper firms overseas. However, the outsourcing of rare earth production became a risk for the United States as they grew increasingly essential to the production of advanced technologies and weapon systems. China, as the paramount producer, understands the bargaining leverage it can gain by withholding such exports to the United States. The United States sees this as a conundrum that needs to be solved via trade and national security policies.

Timeline of Export Controls on Minerals

• • Q3 2010: China was accused of restricting exports of rare earth elements to Japan over a vessel collision near the contested Senkaku/Diaoyu islands, though these restrictions were not reflected in trade data.
  • 20 December 2020: The Energy Act of 2020 became law as part of an omnibus bill. This Act defines “Critical Minerals” and “Critical Materials” in U.S. law.
  • 3 December 2024: China places export controls on graphite and bans exports of gallium, germanium, antimony, and superhard materials.
  • 1 February 2025: Trump initiates new tariffs on China.
  • 4 February 2025: China issued export controls on Tungsten, Tellurium, Bismuth, Molybdenum, and Indium.
  • 13 March 2025: Bill for the Critical Minerals Security Act of 2025 introduced.
  • 20 March 2025: Trump issues Executive Order 14241: “Immediate Measures To Increase American Mineral Production.”
  • 2 April 2025: Trump exempted certain critical minerals during the Liberation Day tariffs.
  • 4 April 2025: China issued export controls on Samarium, Gadolinium, Terbium, Dysprosium, Lutetium, Scandium, and Yttrium.
  • 15 April 2025: Trump issued Executive Order 14272 calling for a tariff investigation into critical minerals.
  • 18 April 2025: Trump announced the “first wave” of U.S. domestic critical mineral production projects.

 

Tariffs and Mineral Controls

The newest round of the mineral spat results from tariffs issued on 1 February 2025. While Trump ostensibly placed a now-quaint 10% tariff on China over fentanyl exports, China chose to respond by placing export controls on tungsten, tellurium, bismuth, molybdenum, and indium. Tungsten, tellurium, and indium are all designated on the Critical Minerals List and the Critical Materials List. None of these minerals are considered rare earth, but they signaled to the U.S. government that elemental inputs for production were seen as fair game in the ongoing dispute.

In the lead up to the “Liberation Day” tariff announcement on 2 April, the Trump administration and its allies in Congress began making policy forays to shore up American mineral production. Most notably, the bipartisan Critical Minerals Security Act of 2025 was introduced in the Senate in late February to assess U.S. critical mineral sourcing, help Americans divest from overseas mineral and REE sources connected to unfriendly nations, and strategize on how best to help Americans develop advanced mining domestically. Trump in Executive Order 14241 on 20 March sought to immediately “facilitate domestic mineral production to the maximum possible extent,” which he viewed as having waned due to “overbearing Federal regulation.”

The mineral trade relations worsened considerably after “Liberation Day.” As shown by the chart above, China had previously elected not to target rare earth elements in its previous export control tranches. The appearance of six of the seventeen REEs was a significant escalation in response to the heavy tariffs lobbed by the Trump administration. This undoubtedly was received poorly by the White House as it underscored China’s wish not to concede any negotiating ground following Trump’s tariff broadside.

The result was that critical minerals would be brought into the tariff war.  On 15 April, President Trump issued Executive Order 14272, which ordered a Section 232 tariff investigation, which the White House deemed “necessary to determine whether imports of processed critical minerals and their derivative products threaten to impair national security.”  This was followed by a presidential announcement on 18 April about a “first wave” of eleven domestic rare earth projects that would receive efficient permitting review.

How Does This Escalate Further

The reality is that the tariff war and its downstream impacts on export control are likely here to stay. Whether this augurs a complete decoupling of the U.S. and Chinese economies is not guaranteed, but the effects of export controls will cause disruptions. On 20 April, it was reported that U.S. automakers would soon be feeling the squeeze of reduced imports of rare earths. On 21 April, it was reported that the Chinese export controls are keeping exports of three critical minerals “at historically low levels.”

In the short term, industry can take some small solace from the fact that the majority of rare earths and other critical minerals are subject to export control only by China. This leaves some possibility of obtaining a valid license from Chinese authorities, though the likelihood of success is small. If the tariff war continues to escalate, these and additional minerals may be subject to complete bans, such as that which impacts Graphite.

The greater risk of the ongoing tariff war is that countries are ultimately forced to choose between China and the United States. Both the United States and China are intimating to other states that the decision may soon become zero-sum. This would radically disrupt the global economy and potentially pave the way for outright conflict.

Conclusions

The ongoing tariff war sparked by the White House is subsuming export controls between the United States and China. Compliance professionals should be keenly aware of what rare earths, critical minerals, and critical materials are in the supply chains of their firms. While most rare earths are merely export-controlled at this point, these designations can change as geopolitical tensions enflame. Industry and the compliance professionals involved should gird themselves for additional disruptions.